Roberto Mancini has signed a new deal as Manchester City manager, agreeing a five-year contract worth at least £25m that secures him at the club until 2017.

Negotiations had been ongoing since mid-May, resulting in speculation why Mancini had not yet confirmed his desire to stay, with some recent reports in Russia linking him to the national team job, but on Monday the Italian said: "I am delighted to be able to give all of my efforts to Manchester City for a further five years. The opportunity that exists to build on our recent success is enormous.

"Manchester City is a fantastic football club, from the owner, chairman, board and the executive team, through to the players, staff and fans. I am very much looking forward to the challenges ahead."

The Italian's previous contract had a further year to run with his position strengthened by the delivery of the club's first championship since 1968 when City pipped Manchester United to the Premier League title in the final moments of last season.

As well as retaining the title, making a serious challenge for the Champions League is Mancini's next priority after City failed to emerge from their group last season, meaning their interest in the competition ended before Christmas.

John MacBeath, City's interim chief executive officer, said: "Roberto's managerial credentials have been well proven in Europe for many years and in leading a team which has won the FA Cup and an unforgettable Premier League title in successive seasons, his ability to manage in the English domestic game is also undisputed.

"This new agreement allows Roberto to focus on the challenge of guiding a team which is capable not only of defending the Premier League title, but one which can compete for European honours."

Confirming the length of the new deal, a statement from the club said: "Manchester City Football club are pleased to announce that a new contract has been agreed with manager Roberto Mancini. The deal, which runs until the summer of 2017, follows the club's most successful season in more than four decades, which concluded in the most dramatic of circumstances in the team's thrilling 3-2 win over Queens Park Rangers in May this year [that won the Premier League title]. Agreement was reached after, in line with club policy, discussions began as the season closed."

Tottenham Hotspur remain favourites to sign Emmanuel Adebayor with City willing to allow a cut-price deal for the striker's sale as the club is keen to remove his £170,000-a-week salary from their books.

Tottenham retain a strong interest in the forward who a successful loan spell at White Hart Lane last season, scoring 18 goals in 37 appearances, and as Adebayor has two years remaining on the five-year contract signed in 2009, when costing City £25m, he could be sold for between £5m and £10m. The 28-year-old's wage demands are an issue with Tottenham unwilling to match his current terms, so Adebayor may be offered a sizeable signing-on fee to compensate for any drop in earnings.